New tobacco taxes predicted to generate US$53mil for Cambodia

PHNOM PENH (The Phnom Penh Post/Asia News Network): The Ministry of Economy and Finance has taken the step of rolling out new guidelines to standardise value-added tax (VAT) for businesses involved in importing and distributing cigarettes.

This move, hailed by health experts, comes into effect from August 1 and aims to ensure a consistent and transparent application of VAT.

In a directive issued on July 25, the ministry made it clear to business owners involved in cigarette imports or distribution that they would now have to apply VAT as per these new guidelines.

This procedure mirrors the application of VAT on other taxed commodities, with a flat rate of 10 per cent on all cigarette supplies in Cambodia.

The ministry also clarified that VAT paid at the point of importation or domestic purchase would be allowed as an income tax credit, deductible with output tax.

Furthermore, the guidelines state that enterprises importing cigarettes for export purposes will be permitted to pay a one-off value-added fee at the point of importation. These firms are obliged to submit returns and pay taxes as per the prevailing laws and regulations.

These new VAT measures have garnered praise from the Cambodia Movement for Health (CMH), specifically Mom Kong, the executive director. Kong lauded the Ministry of Economy’s guidance as a clear indicator of the government’s commitment to combat the health risks associated with cigarettes and tobacco products.